The Mysterious Vancouver Affair

September 20, 1999

Nine months ago the Gold Anti-Trust Action Committee developed an action plan and we have stuck with it. It was patterned after the "enveloping horn" strategy of Shaka, the famed South African Zulu warrior of old. Shaka had his warriors line up in a diamond formation that penetrated his foes from the point of the diamond; then the left and right flanks flared out, almost encircling the adversary. The back end of the "horn" was left open for the foe to retreat through.

GATA's "point" was retaining Philadelphia's Berger & Montague, one of the most highly regarded anti-trust law firms in the United States. We felt they could help us greatly in our investigation of the manipulation of the gold market. Our retaining them let the financial world know we were serious.

The second step was to send out the left flank by alerting the press of our findings regarding collusion in the gold market and to take these findings to Congress. It is our opinion that the gold borrowings, which are facilitating the market manipulation, have become so large that they now have become a danger to the world financial system. In addition, the tactics employed by certain bullion dealers to hold down the price of gold appear to violate the Sherman and Clayton anti-trust laws.

I went to Washington on behalf of GATA and now have relationships with the banking and economic committees. As far as the press goes, I have met with representatives of four wire services, The Wall Street Journal, and others. Many members of the world press receive material and are continually updated on what we are learning and observing about the machinations of the gold cartel.

Step 3 was to unleash the right flank. We felt that after building a record on this issue, the gold companies would begin to get behind GATA -- a volunteer organization that is fighting for them, their employees, and their shareholders. A few mining companies have given us their support and we are very thankful for that. We just need many more of them. We believe that if one of the major gold-producing companies gets behind us, many others will soon follow.

The trick is to find a leader with guts and character.

Many months ago I learned through an Australian source that Barrick Gold of Canada and Normandy Mining Ltd. of Australia killed a well-developed plan for the minting of a millennium gold coin that would spur gold demand. Were they both in the bullion dealer/gold short camp? Then, right after the Bank of England's announcement of its gold sale plans May 7, the chairman of Normandy Mining, Robert Champion de Crespigny came out with a statement for the press that included the following:

"The Bank of England's gold sales could have a positive impact for the precious metal, accelerating the closure of weaker high-cost mines around the world... . This gold will keep on coming out, it will come out at market price, and the worst of production will drop off.... The commentators that are saying they expected someone to bid above gold -- that's an absurd thing for this amount of gold. It is very much in line with what you would expect if you knew the industry or this quantity."

Champion de Crespigny also said he was not opposed to the Bank of England's method of sale, a pre-announced auction, saying the gold price was "strongly affected by sentiment and could be badly hit by sudden and unannounced large selloffs." "We need time to get used to this bidding-type process, which I think it is not a bad way to go because it is exactly the same (way) as the government sells treasury bonds." "I don't see it as a disaster at all."

I was greatly dismayed about these comments and I chastised Champion de Crespigny in my commentary. His remarks matched with what my sources had told me about his killing the millennium coin plan.

Then, out of nowhere in August, came the following, which I included in my Midas commentary:

"Robert Champion de Crespigny was interviewed on the Australian Broadcasting Company's late-night television talk show, 'Lateline,' along with Haruko Fukuda, chief of the World Gold Council, and Tony Warwick-Ching, a consultant with Virtual Metals, a company that analyzes the precious metals market.

"This is a summary of what he had to say:

"* Investment banks are 'making a fortune manipulating the gold market."

"* Many important investment advisers have 'substantial conflicts of interest' when they advise their clients against gold.

"* The price of gold will revive because 'in the end we'll have a much more transparent market.'

* "The Bank of England is selling its gold against the wishes of the British people.

"* The price of gold will strengthen quickly when people see what's going on in the market and the market becomes more open.

"* 'I'm certain gold's going up. It will be as quick as oil was recently."

It appeared that Champion de Crespigny had had some sort of epiphany. Perhaps he would "champion" our efforts?

For that reason I called Normandy's president, Colin Jackson, to determine if I could meet with his chairman. Colin was a delight to talk to. We discussed that possibility and I sent him the document that I sent to Sen. Phil Gramm, chairman of the Senate Banking Committee. Colin gave it to Champion de Crespigny to read. I told Colin I would go just about anyplace to accomplish GATA's objectives.

Initially, Colin thought I could meet Champion de Crespigny on two dates in Miami in early September or later in the month in New York. Great, I thought, we are going to get the ball rolling.

About a week later and a week ago, I received a phone call from Colin who told me plans had changed and I had three choices: 1) Fly to Santiago, Chile, to meet Champion de Crespigny; 2) meet him in a taxi cab in San Francisco; or 3) meet with him in Vancouver, British Columbia, after he arrived at 9 p.m. on a charter flight. That is how busy his schedule was. But, happy to do whatever it took to kick in the right flank of our battle plan, I decided to fly to Vancouver.

I left this last Tuesday morning and, while the trip would be costly and take me away from my daily work, it had to be done. The manipulation of the gold market is becoming more obvious by the day as the price of oil heads for $25 per barrel, copper and aluminum prices make new highs, and bond yields remain above 6 percent and look like they are headed for 6.5 percent amid credit and inflation pressures. All of this and still the gold mining companies remain silent about the orchestration of the low gold price while the industry is being slaughtered like lambs by the bullion dealers and certain government officials.

Tuesday was a beautiful day in Vancouver and illuminated this beautiful city. I arrived early in the afternoon at the Delta Hotel at the airport. The afternoon was mine to kill, as most of the executives at Placer Dome would not be available because of a board meeting in Toronto. I also had just heard that a changeover of Placer Dome leadership was imminent. So I took off for the Richmond mall to get a haircut and pick up a pair of gold (plated) cufflinks in preparation for my meeting with the Normandy chairman.

While travelling about the rest of the city, I could not help but reflect on a promise I had made to an Australian miner. He sent me an email right after the formation of GATA, asking me to help him and the other 20,000 Australian miners who had been out of work for two years. I'll never forget what he said: "Somebody has to do something."

It put a smile on my face to reflect on my promise to him. I hoped that when I returned to Dallas I would be able to let him know that somebody really was doing something and had taken our message and his plea to a leader of the Australian mining industry.

When I returned to the hotel there was a message for me on the telephone. It was from Champion de Crespigny's secretary, so I called her. She told me that she had tried to reach me in Dallas and now called to the hotel in Vancouver to tell me that the chairman was going to be delayed and was sorry but he could not meet with me now. She then told me he would not be arriving until 9 p.m. I then told her that Colin Jackson had told me that was when he was scheduled to arrive in the first place, so this was no problem for me at all. She seemed a bit taken aback and then told me she would contact the chairman and call me again.

Off I went to dinner at the adjacent Pier Restaurant to meet with three cafe members who came by to say hello. Great guys. We hit it off wonderfully and I went back to my room at 8:45 to organize the material I had put together to present to Champion de Crespigny.

The message light was blinking. I was to call Australia.

The chairman's secretary then told me that the charter flight was going to be delayed and that Champion de Crespigny would not arrive at the Vancouver Airport until midnight and, again, that the chairman was sorry; maybe we could get together some other time. I'll never forget one other thing she said -- it was something about how this is not how they normally do business. (I thought: I should hope not).

Well, I told her, "He has to check into the hotel. I will be there just to say hello, introduce myself and chat as he checks in. That way he will know me when we speak in the future." She was silent.

I left a message at the front desk for the chairman that I was in Room 924. At 11:30 p.m. I went down to wait for him and sipped a "cold one" in the lounge. I had direct view of all those coming in. It would not be a big deal to spot anyone, as the Delta Hotel is not a big one and hardly anyone was arriving at this time of night.

An hour went by and I went to the front desk and asked if the chairman had checked in.

To my astonishment, the clerk said, "Yes, at 22:32."

At this point my blood was starting to boil and I was not a happy camper. I thought: How could anyone be so rude? I had spent $2,000 and traveled more than 2,000 miles to try to help this man, his company, his shareholders, and employees, and he won't even acknowledge me, even though his own associate set up the appointment for me.

I have met many Australians over the years and have found them to be the most delightful people. Fifteen years ago I went to Auckland, New Zealand, with my friend, the famed New Zealand Olympiv runner Rod Dixon. It was the year after he won the New York Marathon. After visiting that lovely city and downing some "brewskees" with him, I took off for Sydney and the Great Barrier Reef. The trip was a blast and so were the Aussies I met.

That is why I was so stunned at Champion de Crespigny's behavior.

I had a breakfast meeting with six more Cafe members at 8 a.m. Since the chairman wasn't supposed to leave until 7:45 a.m. (although at this point I did not know what to believe about this anymore), I hung around the front desk at 7:15 in case I might hear someone with an Australian accent. I asked the front desk if the chairman had checked out yet and was told he hadn't. But after waiting a while longer, I left to meet some more engaging Vancouverians.

Then it was back to the airport and a long trip back to Dallas.

As soon as I returned on Wednesday night, I phoned Colin Jackson in Australia. I have not heard back from him yet.

What was Vancouver all about? I would like to say I am bewildered. But my first reaction was the same as the reaction of my associates. That is, someone from the bullion dealer camp got to Champion de Crespigny and told him not to meet me. What else makes any sense? What kind of man would do that to someone trying to help him?

What is more disturbing is that this trip was a secret. Yes, I had told the Cafe that I was going to Vancouver, but I did not say I was going there to see a gold producer, much less Normandy Mining. The question then becomes: Is my phone tapped or are my emails being monitored? I do not wish to run with that one too far, but the thought of it all is disturbing. I was warned by GATA's attorneys last March to expect that kind of thing.

As I ponder my strange journey to Vancouver, this news story has just been sent to me: "London, Sept 17. (Reuters) -- Central banks have been misguided in lending out their gold reserves, allowing bullion banks to make large profits and opening the door to hedge fund short selling, Normandy Mining Chairman Robert Champion de Crespigny said on Friday.

"'I think central banks have allowed the middlemen to make a fortune. That is my first point,' de Crespigny told Reuters at a mining equities conference, explaining the term 'middlemen' as a reference to bullion banks.

"'The second one is how a central bank could be so stupid to lend to a hedger who is only going to sell it,' he added.

"Gold lease rates have been tightening since May, when Britain announced plans to sell more than half its 715 tonnes of gold reserves, unleashing a wave of producer and hedge fund selling that knocked more than 10 percent off gold prices and soaked up much of the metal available for loan.

"Hedge funds and miners usually profit from the difference between gold and money lending rates while those central banks in the market get some return on a reserve asset that costs money to store.

"De Crespigny said that while central banks were right to lend their gold to miners, they erred in lending it to funds.

"'If I was a lender of gold, I would a least make sure that people owned the damn stuff,' he said.

"High lease rates made it difficult for miners to establish new hedge positions, he added.

"'If I were a new hedger at these prices I would be terribly concerned,' he said."

Chairman Champion de Crespigny: I trust you will be as bold and forthcoming with the Australian press when they query you about the Vancouver Affair. One has to wonder what stands behind these words of yours. It appears that you have established a pattern of talking and doing one thing one day, then talking and doing just the opposite another day. What is what with you?

Meanwhile back at the ranch, I have two other ideas that could bolster the effectiveness of our "right flank" battle plan to bring the gold producers aboard in their own defense.

The first is to talk to Bobby Godsell, the chief Executive Officer of the world's largest gold-mining company, Anglogold Limited. One of the Cafe members I met in Vancouver has had email correspondence with Godsell. Upon hearing of my broken appointment with Champion de Crespigny, he immediately sent an email to Godsell. Godsell responded that he would like to meet me to discuss GATA's issues and that he plans to be in the United States in six weeks. I will be calling him soon to see if a meeting can be arranged.

The other sterling opportunity for GATA is to meet executives from most of the world's largest gold producers at the Denver Gold Group Conference one month from today in Denver. Surprisingly, four of the gold companies that will be there have made some contribution to GATA. So have some of the money managers planning to attend. They want GATA represented at the conference to let the gold producers know what we are doing and we can do for them.

Michelle Stelle runs the Denver Gold Group and has done a marvelous job in developing it. I did a favor a for her a couple of years ago when she needed a speaker; I arranged one for her. So I was shocked when she told me that she not only could not let me address the group, but could not even invite me to attend either.

This makes no sense at all until one realizes that "Hannibal Lecter," the famed bullion dealer, will be there along with many other Hannibal Cannibals. There they are again -- just more evidence that the bullion dealers are in full control of the gold market. It is a sad state of affairs. If gold shareholders knew the extent of what is going on here, they would be outraged. Why invest in gold companies if they are going to allow this to continue?

I have made a reservation at the Westin Hotel in Denver anyway and requested a hospitality suite, but after the Vancouver Affair I have to think it through whether I should attend. I just may have to stay focused on people who care about what is occurring.

Twenty thousand out of work Australian gold miners and millions of others are counting on somebody to do something. GATA has no intention of letting them down.

Bill Murphy ( Midas )

Midas du Metropole

After graduating from Cornell University, Bill was a starting wide receiver with the Patriots of the old American Football League and has been around the financial and commodities markets ever since. He owned a futures firm in N. Y. that specialized in precious metals and was a contributor to Veneroso Associates, a global strategic investment firm and producer of the 1998 Gold Book Annual.


78 percent of the yearly gold supply is made into jewelry.

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